Foreigners demand Australian dollars

Question

BlackTom AI · Accepted Answer

Demand for a country's currency arises whenever foreigners must pay in that currency to acquire domestic products, assets, or services — for example, to import goods, buy domestic financial assets, or spend while visiting.

1) Relevant knowledge points and concepts
- Foreign exchange demand: foreigners must obtain Australian dollars (AUD) whenever they transact with Australian residents or institutions.  
- Current account transactions (goods and services): imports require payment in AUD or settlement through banking channels that ultimately convert foreign currency to AUD.  
- Capital/financial account transactions: purchases of Australian bonds, equities, or real estate require conversion into AUD to settle.  
- Travel and tourism: non-residents convert their home currency into AUD to pay local hotels, restaurants, and transport.

2) Step-by-step reasoning
- Option (a): A foreign buyer of Australian goods must pay exporters in AUD (or through banks that convert to AUD), so this creates demand for AUD.  
- Option (b): A foreign investor buying Australian bonds needs to transfer funds into AUD-denominated assets, increasing demand for AUD.  
- Option (c): Tourists visiting Australia exchange their currency for AUD to spend domestically, so tourism generates AUD demand.  
Each scenario independently leads to foreigners acquiring AUD; therefore all three together also create demand.

3) Calculations / intermediate steps
- No numeric calculation is required. Logical steps: identify transaction → necessity to pay in AUD → foreign currency exchanged for AUD → increase in demand for AUD.

4) Why the correct answer is correct
- Because each listed activity (buying goods/services, buying financial assets, and holiday spending) requires foreigners to obtain AUD, all are valid reasons for foreign demand for Australian dollars.

5) Why the other options are incorrect
- Options (a), (b), and (c) are individually true but incomplete — they describe only one cause each. None alone captures every reason foreigners demand AUD.

6) Conclusion
- Therefore the correct choice is d. All of the above. This matches the provided answer.

Foreigners demand Australian dollars单项选择题

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